Pension Remedy Update Feb 2021 -2

12 February 2021

Dear Colleagues,

The below message is from the National Secretary Alex Duncan.

Following last weeks announcement PFEW have now had the opportunity to go through the Government’s consultation response in detail and yesterday met with the Police Scheme Advisory Board to establish what this means for all of our members on the varying schemes.

In short summary the Government response details that:

• The Remedy applies to all who were members of a ‘legacy’ public service pension scheme (or eligible to be) immediately prior to 1 April 2012 and have a period of service after 31 March 2015 during which they were members of a legacy or reformed scheme. 

• If you joined the police service on or after 1 April 2012 the Remedy will not apply to you.

• The Remedy period is 1 April 2015 to 31 March 2022.  Eligible members will have a choice on retirement whether their scheme benefits relating to the Remedy period remain in their legacy scheme, or they choose to convert it to 2015 scheme membership. This is particularly helpful as we know there will be some who are better off in the reformed schemes than the legacy schemes.

The Government has chosen to implement the Remedy through the Deferred Choice Underpin option, which was the option we recommended in our response to the consultation back in October 2020. This means that members do not have to choose which scheme they receive benefits from during the Remedy period until they reach retirement age and enables them to make their decision based on fact rather than an estimate.  They will be able to make a choice based on what option is best for them. 

The important thing to note is many of the positive aspects of schemes are being retained and this is not being used as an opportunity to take away the concessions that were agreed as part of the transitional protections but were not ruled unlawfully discriminatory. For example, the link to final salary for legacy schemes has been retained.  

When is the implementation?

Calculating and implementing the Remedy for each individual which will take some time.  Because of this the actual implementation of the Remedy won’t be completed until October 2023 at the latest. The administrative implementation of the Remedy will not change the Remedy period (1 April 2015 – 31 March 2022) nor the date on which legacy schemes will close (31 March 2022) and all remaining members of those schemes are moved to the 2015 CARE Scheme (1 April 2022). This is a positive in the sense that it gives pensions administrators time to deliver this correctly and consistently however it is a further delay for our members who desperately need and deserve clarity around their pension, especially those who are coming up to retirement.

Issue around tax

There are a number of complex issues around the need for taxation matters to be reassessed in order to return members to the position they would have been in had the discrimination not occurred. We have concerns around some of what is being proposed as a solution to these matters and will be raising them with the Home Office and Treasury.

What’s next?

Whilst it is positive that the Government has chosen to use deferred choice to implement the Remedy, it is disappointing that those who are due to retire soon still don’t have the clarity they need and deserve to be able to make a decision about their retirement.

We will be involved in the consultation on the primary legislation and will be seeking legal advice on certain aspects of the implementation throughout the process. In particular we are scrutinising the updated Equality Impact Assessment to ensure that no unjustifiable discrimination is caused as a result of remedying the existing discrimination.

Alex Duncan